Monday, September 7, 2009

What are some methods of Measurement of the Elements of Financial Statement?

Mainly accountants will use historical costs when computing the financial statements. Sometimes these measurement methods aim to preserve the matching principle, conservatism, comparability and consistency.

The Financial Statements are the best attempt to at mathematical models of business enterprises economic performance over a specific period of time and its economic status at the end of that period. Therefore, all transactional data is recorded and analyzed for that purpose of feeding the mathematical models that lead to the financial statements.

Improving and refining the Financial Statements is an ongoing task important for the allocation of scarce resources in the global economy.